tv Your Bottom Line CNN January 19, 2013 9:30am-10:00am EST
today's events. i'll see you back here in 30 minutes. "your bottom line" starts right now. >> thanks, randi and victor. see you at the top of the hour. good morning, everyone. i'm christine romans. forget the golden globes, disregard the oscars. one script is being written right now in washington that everyone can't wait to see. and you -- you are the only critic that matters. obama's economy, the sequel, crafting a legacy. you remember the original. the president inherits the worst economy since the great depression. billions in bailouts save the auto industry and stabilize wall street. where are the jobs?
but the star of this show has his enemies, millions of americans turn to the tea party. their mission? stop this president from making fundamental changes, changes they see permanently damaging the u.s. economy. gridlock follows. and the 112th congress passes the fewest bills in 40 years. but in the end, its congressional approval that plunges, now standing at just 14%. the president insisted on higher taxes for the wealthy. part of his campaign designed to cast mitt romney as out of touch. his victory sealed, this president will have a sequel. >> for the united states of america, the best is yet to come. >> the original was a drama. but what the sequel needs is action. to it craft a legacy, this president must bring lawmakers together. cliff after cliff, short-term thinking and political bickering at every turn. dysfunction is ruling
washington. but look beyond that and this economy is poised for a recovery, a recovery the audience, you, the american people, have desperately been waiting for. businesses hiring, home foreclosures down, the value of your house rising, resilient stock market at five-year highs, historically low interest rates. plus, consumers are still spending. but, beware, most sequels are never as good as the original. so what will obama's economy, the sequel, look like? john avalon is a columnist at the daily beast. international business at the university of maryland, and annie lowrie is an economic policy reporter for "the new york times." all great movies have memorable endings. when we look back at the end of the first term, is this a blockbuster or dead? >> absolute free fall, stock market hits its historic low
after the first 100 days. trying to make a case that it could have been worse. not the most inspiring re-election slogan. compare to where countries in europe are, that chose a more traditional path of austerity, we do appear poised for recovery. if you begin on a freefall and end on an up note, that has the makings of a blockbuster. >> you say the president's policies are responsible for holding america back? >> president reagan had a deep recession, unemployment peaked at 10.8%. at this point he had the economy growing at 6%. we should simply be doing better. there are important legacies here. the health care legacy. although it's going to prove to be very expensive, that's what will timely force reform in an american system that doesn't measure up to how well the europeans do. and i think it's in areas like that that we'll see fundamental changes in american society. you know, if george bush hadn't had the financial crisis, mern
america would not have been changed at all by his administration. if barack obama had the economy growing at 5%, it still would be fundamentally changed by virtue of his presidency. >> i want to bring three more cliffs on the horizon, the debt ceiling, sequester and continuing budget resolution. the very beginning of this second movie, how is this going to set the plate? >> well, i think that it's important to note that the hardest part is over. they managed to get through the fiscal cliff without allowing these huge tax increases in spending cuts. they delayed the spending cuts. there's a lot of work ahead of them. there's been deficit reduction they've managed to get done in the past year. the problem, i think, is political. it's not economic. right now, congress is obviously very divided. they're not working together. they're going to have to, if they want to, for instance, raise the debt ceiling and avoid a financial crisis. the question is, can barack obama do a better job of helping them do that because there's been a lot of complaints in congress that he hasn't been
leading. he has even offended members of congress by applying they're not doing their job. so i think there's this political question that's overlaid this very thorny economic question. >> will the leadership of this president make a difference? will he have to lead differently than he did in the first time? >> he does and i think he has already learned how to. he has shown a learning curving, the way he has framed the debt ceiling debate saying he will not let america be held hostage in these negotiations. that's one of the real key questions of a second term. can you go from lucky or good to good to great, is this. will the president really lead on debt? will he pull a nixon on china when it comes to debt and start leading on entitlement reform? like clinton did on health reform. he has always talked a good game. can he really lead on this issue and leave us in a fundamentally more sound fiscal foot when he leaves office?
>> american middle class term two versus term one? >> i don't know that it will be much different. when you look at the forecasts, whether democratic or republican analysts, they're talking continuation of 150,000 jobs a month. that's if nothing goes wrong. the slightest little hiccup could throw this economy off balance and put us in a recession. while mr. obama might not necessarily be to blame, it would happen. we simply have to grow better. the style of leadership has changed and improved but where are the proposals to really get stuff done and get the economy jump-started ? i'm waiting to see that. >> peter morissey, annie, john, don't any of you move. we'll lay out the challenge, b jobs part of that challenge. getting people back to work. a quiz for you at home, how many jobs have been created since this president took office? a, 76,000, b, 276,000, c, 476,000 or d, 1.76 million?
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fiscal cliffs ahead, struggle economy, debate on gun violence and an election full of promises. president obama's legacy here is on the line. his second term start this is week. depending what your political views are, he's either in a tough spot or off to a solid start. he is a job creator. look at what was happening in the first few months of office, millions of jobs lost, nearly 800,000 in his first full month in office. that trend reversed and now, going into his second term, he is a net job creator. adding 476,000 jobs under this president's watch. but the unemployment rate remains stubbornly high, 7.8%. john avalon, peter morissey and annie lowrey are back with me.
he got over the tea party. >> the unemployment rate has come down very, very slowly. even if you're looking at people who do have jobs, if you're middle income, you haven't really seen strong wam gains for more than a decade. if you account for inflation, people are earning less at that middle income than they were in 1999. it's feeling really bad for the middle class. i think that president obama has tried to do more to make sure that people who are middle income have health care. he has made the tax code more progressive. i don't think anybody quite knows what we can do to get those millions of middle class jobs with wage gains that we need. it's a really, really pressing question for this economy. >> when people are living paycheck to paycheck who weren't ten years ago, that still becomes a problem even if you have health care and some of these other things. john, we are in the throes of partisanship in washington. even the president is pointing fingers. >> we are poised for a good year if we make smart decisions and
sound investments. and as long as washington politics don't get in the way of america's progress. >> what breaks that juggernaut? can it get worse than this or -- please tell me this has got to be the bottom. >> every time we've said that it can't possibly get any worse in washington, it magically somehow gets worse in washington. we are in a surreal situation where right now probably the biggest impediment to america's recovery is the u.s. congress. if we have another downgrade, which is possible, that could have enormous repercussions throughout our economy. that's the dangerous game being played in washington. >> i hear, look, if you look at the last debt ceiling showdown, stocks are up since then. we created jobs since then. you people are all just chicken little. >> to annie lowrey's point, what happens on main street more than
wall street is what's happening. middle class has been squees squeezed for decades. they need an advocate out here. the surreal situation we're facing is that this president gets called a socialist. he is probably the best thing that ever happened in terms of rated growth. >> that's a good point. stock market is up quite a bit from when he began the first movie, if we continue that metaphor. what's up next for crafting this legacy the next four years? >> he has to make an adjustment with regard to regulation. we all agree something has to be done. we need a restructuring kind with regard to wall street. other segments of the economy just completely shutting down drilling in the gulf certainly makes it safer, but it's like burning down the house to get rid of the myself.
horizon and so forth isn't working. we have to create 360,000 jobs a month not just to keep up with population growth but to get unemployment down to 6%. those are the kinds of numbers we need. >> annie, let's bring in the whole regulation theme here. i spoke to a small business owner earlier this morning who said to me, look, in small business we're concerned with hiring more people because we don't know how we're going to implement the president's health care. we don't have demand coming in. we're concerned about so many things. what helps in the next four years for small business to feel -- to feel better about things and start growing and hiring? >> i think one important thing to remember is that for a lot of small businesses, regulation and taxes are a problem. i would never argue that they weren't. if you ask small business owners what their biggest problem is, they still say it's that they don't have enough customers, the economy isn't growing quickly enough, business is still sluggish. that remains the really pressing issue. one nice thing about 2013, it
looks like we could get some bang up growth for the first time in basically half a decade at this point if housing keeps turning around the way that it is. if we get to exporting our natural gas and i think that could make that regulatory burden feel better for these small businesses if we had short-term growth. >> that could be a small irony in the second term if we see an economic improvement because, actually, of fracking and shale exploration. it would be an historic irony and possibly a real boom to this president's economic -- >> i hope you're right, the genie will come out of the bottle in this second term. hopefully, you're right. john avalon, peter morissey, annie lowrey, thank you. the president's push to curb gun violence. and then the push back. next.
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>> that was the worst day of my presidency. >> that's how the president described the tragedy at sandy hook elementary school. will his legacy call for tougher gun laws? he called to reinstate the assault weapons ban, restrict ammunition magazines to no more than ten rounds and require background checks on all gun purchases. he also signed 23 executive actions. for the first time in years, it looks like gun legislation could happen and that immediacy is turning the fight over the president's plans very personal. he invited four children who wrote him letters, begging for an end to gun violence, invited them to join him at the white house. 8-year-old grant wrote i think there should be some changes in the law with guns. 11-year-old julia wrote even though i am not scared for my own safety, i am scared for others. i have four brothers and sisters.
>> these are kids. this is what they're thinking about. and so what we should be thinking about is our responsibility to care for them. >> but the national rifle association, the nra, it got personal, too, releasing a new ad invoking the president's children. >> the president's kids more important than yours? then why is he skeptical about putting armed security in our schools when his kids are protected by armed guards at their schools? >> this was fine-tuned for friendly audience. one cable channel, a hunting network. shows that not even the president's family is off limits when it comes to the debate over gun violence. meantime, gun sales and membership in the nra are surging. the group says 250,000 new members have joined since the newtown shooting when calls for tougher gun laws began surfacing. senior vice president of security at wed bush securities analyzes companies in the firearms space. you don't have a dog at this fight. you're looking at the companies and profitability of companies.
look, a cnn "time"/orc poll found 50% favor stronger gun laws. what's your read? will the words obama and gun legislation be written in the same words of the history book? >> that is certainly the intention of the obama administration. you know, it was certainly their intention the first four years of their administration, as well. but going into the next four years, what has really changed in the last several weeks is the public sentiment has swung so far in their favor in the wake of the newtown shootings. so they realize that they've got a tough fight ahead of themselves. facing a republican-led house of representatives. certainly we've got motivated people on the other side of the argument who are trying to defend what they perceive to be their second amendment rights to bear arms. but with public sentiment having swung the pendulum in the favor of the obama administration's platform and tightened gun control legislation and the specific clauses banning assault rifles and high capacity magazines, i think they're more than motivated now. >> gun sales are up since
newtown. up since newtown. does that tell you that investors at least think there's not going to be amainingful decrease in the value of gun manufacturers and in the sale of guns in america? >> well, i think what has happened is since the newtown shooting, gun sales have absolutely exploded. in the month of december, background checks with the federal government were up 58% indicating that there were very, very strong year-over-year sales in firearms. right now if you walk into most retails of firearms, the shelves are almost empty for both guns and ammunition. so that's part of the reason, you know, these firearm stocks are probably going to see record sales in earnings over the next few quarters as a result of that. >> this week a group of activists delivered 300,000 signatures to the walmart near newtown, connecticut, demanding that that retailer stop selling these modern sporting rifles. listen. >> we don't feel in a store where it's a family-friendly store, where you're buying a stroller and three aisles away you can buy a military-style assault weapon. this -- this doesn't belong.
>> you know, anti-gun activists may not like that walmart sells these things, but the demand is there. very brisk demand. you point out that for walmart it's sales of these things are a small percent animal of its overall sales. >> that's right. for a big retailer like walmart, you know, firearms, first of all, they don't sell handguns. but partly because of the public sentiment against the particular form of fireman. for a company the size of walmart's broad, frankly geographic platform, there aren't that significant -- they're not that significant a source of sales and profits. >> but the sporting rifles like the ones at newtown -- it's interesting because i hoped to interviewer the president of walmart about this. they were making some other initiatives, talks about -- about hiring veterans and some -- they knew i would ask about guns and they weren't really interested in sitting down and talking about guns. nice to see you, wedbush securities. >> thank you. coming up, you've been saving diligently for your
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congratulations, you've done everything right. you set aside money for retirement while saving for your children's college education. every spare dollar has gone into that 529 plan, and you will not be saddling your kids with $26,000 in student debt. that's the average in. no, not you. you sacrificed. brace yourself. here's what a new study from the university of california merced concludes -- the more you contribute to your children's education, the lower their grades are likely to be. that's right. you're buying them a golden ticket, and they're tarnishing it. what are you supposed to do? are you supposed to make them pay their own way? what we can do is help college kids keep their debts as low as
possible and acknowledge that that golden ticket of a college education won't just be automatically stamped in the workplace. you don't float through. job success depends on your major, your internships, networking, frankly, a little luck. remember the 1967 career advice in "the graduate"? >> i just want to say one word to you -- just one word. >> yes, sir? >> are you listening? >> yes, sir, i am. >> plastics. >> just one word. s.t.e.m. today's plastic, s.t.e.m., science, technology, engineering, and math. graduates in those fields are more likely it find a job and make money. the starting salary for engineering graduates is nearly $62,000. for humanities and social science majors, $37,000. you don't have to be a s.t.e.m. grad to do the math on that one. back to the student loans for a moment. if you believe that study, maybe a little student debt isn't such a bad thing. but you've got to keep that down. scour for grants and scholarships. earn college credits early to
graduate sooner. remember this rule of thumb -- >> your total education debt at graduation should be less than your annual starting salary. >> think about that for a minute. but remember, student loan debt isn't insurmountable. you can pay it back. just ask america's most famous student borrower and chief. >> look, we were lucky enough to land good jobs. but even with those great jobs that we had, we only finished paying off our student loans about eight years ago. think about that -- i'm the president of the united states. [ laughter ] >> see, the president can even laugh about his loans now. but this is no joke. a college education is an investment. maybe the most important one you'll ever make. this week i had the honor of speaking to students at knox college, a private liberal arts college, in gailsburg, illinois. i told them there are four available workers for every job in this country. i said, look around you, look around you in that room. you got to beat out three of those classmates just to get hired. you still have a golden ticket. you're just going to have to work harder to get it punched. parents, i want to hear from